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2024 (4) TMI 131 - ITAT DELHIRevision u/s 263 - assessment of trust - donations given out of accumulated funds u/s. 11(2) of the Act of earlier previous years - as per CIT amount accumulated / set apart with the assessee trust within the meaning of section 11(2) of the I.T. Act has been paid / donated to Shri Raghunath Balika Vidyalaya and Hindu College during the relevant previous year, such application of funds by the assessee is clear violation of explanation to section 11(2) r.w.s. 11(3) HELD THAT:- Amount has been paid as donation to other Trust / Charitable Organisations and such payment will be hit by Explanation to 11(2) r.w.s. 11(3)(d) of the Act and in view thereof the amount donated by the assessee to other institutions i.e. Hindu College and Shree Raghunath Balika Vidyalaya out of accumulated fund should have been brought to tax by the AO. Hence, Ld. CIT(E) correctly observed that that as per Explanation to section 11(2) of the Act read with section 11(3)(d) of the Act, donations given out of accumulated funds u/s. 11(2) of the Act of earlier previous years are not allowable as application of income for charitable or religious purposes and the same shall be deemed to be income of the assessee of the previous year 2016- 17, therefore, AO failed to examine this issue, which should have been done during the assessment u/s. 143(3) of the Act and accordingly assessment order exhibits lack of proper inquiry / verification by the AO, which was required to be carried out in the instant case. As a result thereof, Ld. CIT(E) has rightly held that the assessment order to be erroneous in so far as it is prejudicial to the interest of the revenue as per provisions of section 263 of the Act and accordingly, the same was set aside u/s. 263 of the Act to the file of the AO for making a donovo assessment after proper examination of the issue involved and due verification wherever required by way of affording reasonable opportunity of being heard to the Assessee Trust and pass a speaking and well reasoned order. Hence, the order of Ld. CIT (Exemption) in our considered opinion, does not require any interference on our part, hence, we uphold the same and accordingly, the Ground Nos. 1 to 3 raised by the assessee stand dismissed.
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